torsdag 11. juli 2019

In A Newly Bipolar World, Europe is Caught in the Middle

Many G-20 countries share Trump's reservations about China, but are concerned that a trade war could destroy a world economic order that America played a large role in building. It boils down to scale: China cannot be compared to Iran or Japan, America's nemesis in the 1980s. The U.S. and the Soviet Union once had a trade volume of $2 billion per year. Trade with China is currently $2 billion per day.

If the summit in Osaka doesn't end with an economic cease-fire, it could have dire consequences not only for China and the U.S., but for other countries as well. The Chinese market is more important for Germany's export-oriented industries than it is for the U.S. As early as last summer, over 40 percent of the German companies operating in China and more than half of the German companies operating in the U.S. began feeling the consequences of the tariffs.

Europe is stuck in the middle of the conflict. On one side, EU Trade Commissioner Cecilia Malmström has emphasized her commitment to multilateralism. "We expressly do not share Trump's approach. China is an economic rival for us, but not a political enemy," she said in an interview with DER SPIEGEL.